Deckers Outdoor Corporation upped its full-year quidance after reporting net sales increased 34.4% to $97.5 million for the first quarter ended March 31. Growth of the UGG and Simple brands more than compensated for a dip in sales of Teva shoes.
Gross margin rose 173 basis points to 47.3%. Earnings per share rose 17.8% to 86 cents, cmopared to 73 cents in the year earlier quarter.
UGG brand net sales for the first quarter increased 83.6% to $54.8 million compared to $29.8 million for the same period last year. The significant sales increase was attributable to strong domestic demand for the UGG brand coupled with greater distribution for the spring collection versus the same period a year ago.
Teva brand net sales decreased 2.6% to $37.7 million for the first quarter compared to $38.7 million for the same period last year. The modest decline in sales was the result of lower than expected consumer demand in a difficult retail environment, which impacted the level of projected reorders during the quarter.
Simple brand net sales for the first quarter increased 25.2% to $5.1 million compared to $4.0 million for the same period last year. Simple sales continued to benefit from heightened awareness and increased demand for the brand driven by innovative product offerings, a broader marketing and advertising effort and increased points of distribution.
Sales for the eCommerce business, which are included in the brand sales numbers above, increased 75.4% to $15.6 million for the first quarter compared to $8.9 million for the same period a year ago.
Sales for the retail store business, which are included in the brand sales numbers above, increased 145.4% to $5.3 million for the first quarter compared to $2.2 million for the same period a year ago.
Full-Year 2008 Outlook
Based upon the company's first-quarter results coupled with improved visibility into the second half of the year, the company currently expects its full year revenue to increase approximately 31% over 2007, up from previous guidance of approximately 25%.
The Company currently expects its full year diluted earnings per share to increase approximately 27% over 2007, up from previous guidance of approximately 20%.
Fiscal 2008 guidance includes approximately $8.8 million of stock compensation expense.
Second Quarter Outlook
The company currently expects second-quarter 2008 revenue and
diluted earnings per share to increase approximately 50% and 30%, respectively, over 2007 levels.
DECKERS OUTDOOR CORPORATION
AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(Unaudited)
(Amounts in thousands, except for per share data)
Three-month period ended
March 31,
2008 2007
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Net sales $ 97,535 72,575
Cost of sales 51,387 39,158
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Gross profit 46,148 33,417
Selling, general and administrative expenses 29,088 18,345
———— ————
Income from operations 17,060 15,072
Other (income) expense, net:
Interest income (1,389) (1,166)
Interest expense 32 299
Other, net (251) 40
———— ————
Income before income taxes 18,668 15,899
Income taxes 7,374 6,448
———— ————
Net income $ 11,294 9,451
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Net income per share:
Basic $ 0.87 0.75
Diluted 0.86 0.73
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Weighted-average shares:
Basic 13,008 12,595
Diluted 13,175 12,932
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